Leading with Georgia

Research evidence excerpt

Leading with Georgia

Macquarie Equity Research CleanSpark

Key Risks to Investment Thesis Company Description

• Sudden weakness in bitcoin pricing as a result of changes CleanSpark is an owner and operator of multiple data centers

in investor sentiment, macro volatility, regulation, or across the US largely focused on using low-carbon power. The

other exogenous shocks. This negatively impacts both company had its infancy in microgrids and clean energy, with

margins and digital assets held in treasury, with the former bitcoin mining becoming a focus in 2020 with the acquisition

generally supportive of meeting both working capital and of ATL Data Centers. ATL was located in College Park, Georgia

expansionary capex investment needs. and ultimately unlocked access to bitcoin mining in the

• Major step-ups in global network hashrate ahead of our state. The company is headquartered in Nevada and owns

forecasts. ~5m square feet of real estate and infra adjacent to power

• Sudden increases in interest rates and consequential resources.

impacts on tech multiples and risk assets generally. A

longer-dated risk of this is scope for higher interest rates

should the appetite of mainstream lenders for the sector

increase.

• Local data center and crypto mining regulation impacting

the ability for miners to operate in certain jurisdictions,

procure the energy required for bitcoin mining, or restrict

the use of bitcoin, impacting revenues from bitcoin rewards

received in the mining process.

• Risk of power pricing to become unfavorable, driving

suboptimal margins and use of cash. This would be

exacerbated for insufficiently priced hosting contracts/

operations.

• Should equity issuance be needed to fund growth capital,

this may yield a dilutive result if bitcoin price fluctuations